On Friday, Stephens, a financial services firm, increased its price target for Home Bancshares (NYSE:HOMB) to $30 from the previous $28, while maintaining an Overweight rating on the bank's stock. This adjustment follows the company's second-quarter financial performance, which exceeded market expectations.
The bank reported strong net interest income (NII) trends and exceptional cost control measures during the second quarter of 2024, leading to earnings per share (EPS) and pre-provision net revenue (PPNR) that surpassed consensus forecasts. In light of these results, Stephens has revised its EPS forecast upwards and sees a clearer trajectory for year-over-year EPS growth in both 2024 and 2025.
Analysts at Stephens believe Home Bancshares' organic growth strategy is effectively driving EPS growth and risk-adjusted profitability. They also highlighted the bank's strong capital position, high valuation, and experience in mergers and acquisitions (M&A) integration, positioning it as one of the most capable acquirers in the region.
Looking forward to 2025, Stephens is optimistic about the success of Home Bancshares' M&A strategy. The new $30 price target is based on a 14-times multiple of the firm's 2025 EPS forecast and 2.2 times the 12-month trailing book value per share (TBVPS) forecast. The Overweight rating reflects the firm's positive outlook on the bank's stock performance.
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